O’Neill Warns PNG PM Marape’s Reckless Banking Decision Sparks Financial Tsunami
Former PNG Prime Minister Peter O’Neill has accused the Marape government of inflicting severe economic damage on Papua New Guineans through its decision to switch banking arrangements away from Bank South Pacific (BSP). He said the move benefits no one and has devastated local investors.
O’Neill said BSP is 86 percent owned by Papua New Guineans and that the government’s sudden withdrawal of accounts led to an immediate loss in share value. He said the market punished the decision, wiping out more than K2.2 billion in a single day. He added that ordinary workers, superannuation members, and retirees were among those most affected.
He drew attention to the Mineral Resources Development Company (MRDC), which only two months ago became BSP’s second-largest shareholder after acquiring 15 percent of shares. O’Neill said MRDC had praised BSP as the best-performing bank in the Pacific, yet now finds its investment undermined by the government’s actions.
Landowners from major resource projects such as Kutubu, Moran, Gobe, Hides, Angore, and Ok Tedi, who invested through MRDC, have suffered heavy losses, according to O’Neill. He said the decision represents a breach of trust and questioned whether it amounted to insider trading designed to devalue BSP.
He warned that the impact is not limited to PNG. Superannuation funds in Solomon Islands and Fiji, which had invested in BSP for security, are also facing losses. O’Neill described this as a “financial tsunami” spreading throughout the region.
The former prime minister also raised concerns about the National Banking Corporation, questioning its ownership structure, licensing, and ability to manage public money. He said the rush to license the bank within months raises serious doubts about due process.
He said the move comes at a difficult time when PNG faces rising debt, economic contraction, a weakening kina, and the prospect of being grey-listed for financial risks. O’Neill said the government’s action only worsens the situation and damages the nation’s reputation in the Pacific financial system.
O’Neill concluded that the Marape-led government has acted against the interests of its own people. He said the policy amounts to an economic crime that destroyed the savings of workers, retirees, and landowners. He urged Prime Minister James Marape to resign, saying the country deserves better leadership.
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